Week 2 of a Typical FP&A Calendar: Guide Part 2 of 4

Here is a quick recap:

WEEK 1: ACCOUNTING CLOSE AND MANAGEMENT REPORTS

1. FLASH REPORTS (For Key Revenues Expenses)

Brief summary of financial data and key performance indicators (KPIs) that provides a snapshot of a company’s financial health and performance.
Covers a specific period, a day, week, or month, and is prepared quickly to provide timely insights.
Focuses on the most critical information and highlights any significant changes or trends.
A way to keep decision-makers updated on the financial performance and enable them to make informed decisions based on the current state of the business.

2. MONTH CLOSE AND ACCOUNTING REVIEWS

Month close: Ensure that all financial transactions for that period are recorded accurately and completely.
FP&A assists the Accounting team in a smooth month-end close.
BVA stands for Budget Variance Analysis and helps assess how well the company’s actual financial results align with the budgeted expectations.
It involves comparing the budgeted revenues, expenses, and other financial metrics with the actual figures and analyzing the variances.
Focuses on the most critical information and highlights any significant changes or trends.

3. MONTH END REPORTING PACKS with COMMENTARIES

Comprehensive summaries of a company’s financial performance at the end of each month.
Detailed overview of the company’s financial performance, key metrics, and other relevant information for that particular month.
Typically distributed to senior management, to keep them informed about the financial health of the organization.
The actual results from last month are compared to both the budget and the most up-to-date forecast.
Variance analysis, commentary, and business recommendations

Let’s look at WEEK 2: FORECASTING AND BUSINESS REVIEWS.

The Forecast cycle starts with finance reviewing historical performance, assessing current trends, and considering any external factors that may impact the forecast.
The finance team incorporates this information into the preliminary forecast.

Collaboration with key business teams is vital for accurate forecasting.
The finance team engages with department heads, sales teams, marketing teams, and other relevant stakeholders to gather their inputs and insights.
This collaborative effort ensures that the forecast aligns with the operational realities of the business.
The finance team incorporates feedback from these teams and refines the forecast accordingly.

The FP&A team presents the forecast, discussing key assumptions, and seeking input from the CFO.
The CFO provides valuable insights, challenges assumptions, and ensures the forecast is in line with the organization’s financial goals and objectives.

Once the forecast is finalized, it is uploaded into the designated financial planning system.
Uploading the forecast into a centralized system facilitates easy access, data consolidation, and automated reporting.
To maintain consistency and integrity, it is crucial to lock the current forecast once it has been uploaded into the system.
This ensures that the forecast remains unchanged, preventing inadvertent modifications that could compromise accuracy.
Locking in the forecast also establishes a clear baseline for tracking performance and enables effective comparison with actual results.

These meetings bring together FP&A and business stakeholders to review the financial performance, discuss variances, and gain insights into the factors driving the results.
Monthend reviews involve analyzing the financial results for a specific month, including revenue, expenses, and other key financial metrics.
Quarter end reviews are more comprehensive and encompass the entire three-month period.
Helps bridge the gap between financial data and operational realities, leading to better decision-making.